Exhibit 99.1
CINCINNATI BELL INC.
PRESS RELEASE
Investor / Media contact:
Kevin Sullivan
513.397.5752
kevin.sullivan@cinbell.com
CINCINNATI BELL INC. REPORTS FINANCIAL RESULTS
FOR THE THIRD QUARTER OF 2003
o Generates $54 Million in Cash Flow*
o Reduces Net Debt** by $516 Million to $2.3 Billion
o Launches GSM/GPRS Wireless Network
CINCINNATI - October 30, 2003 - Cincinnati Bell Inc. (NYSE:CBB) today announced
its financial results for the third quarter of 2003. For the quarter, the
company reported revenue of $315 million, operating income of $130 million, and
net income of $45 million, or $0.18 per diluted share. The company continued to
execute against its stated priority of generating cash to de-lever its balance
sheet. Cincinnati Bell Inc. produced cash flow* of $54 million and completed two
debt exchanges for common stock, reducing net debt** by $516 million.
OPERATIONAL HIGHLIGHTS
o During the third quarter, the company increased the penetration of its
consumer service bundles in Cincinnati, driving a 2 percent increase in
revenue per household to $74. Consumer penetration of the company's flagship
Complete Connections bundle now stands at 43%.
o Strong demand for the company's Digital Subscriber Line (DSL) services drove a
31 percent increase in subscribers versus the third quarter of 2002. The
increase in DSL lines offset modest access line losses of 2 percent versus a
year ago.
1
o On October 15, the company also launched Cincinnati Bell Wireless' Global
Standard for Mobility/General Packet Radio Service (GSM/GPRS) network. This
new network gives the company's customers access to an exciting new array of
wireless handsets and data services, while also providing the company with
additional capacity for new customer growth.
Excluding results of operations from the Broadband Services segment, revenue of
$285 million was down 1 percent from a year ago, while operating income of $96
million increased 9 percent. The operating margin of 34 percent improved 3
points versus a year ago, reflecting a decrease in operating expenses of $11
million, or 6 percent.
"In our first full quarter following the sale of the broadband assets, our
remaining businesses continued to steadily generate cash in support of our top
priority - reducing the company's financial leverage," said Jack Cassidy,
president and chief executive officer of Cincinnati Bell Inc. "I am particularly
pleased that we have contained costs and improved profitability in order to help
fund important initiatives like the launch of our GSM/GPRS network, while
continuing our heritage of providing excellent customer service."
SPECIAL ITEMS
The following special items impacted Cincinnati Bell Inc.'s reported results for
the third quarter of 2003:
o The company's Broadband segment recorded an additional gain of $37 million
upon obtaining all remaining regulatory approvals and closing the final stages
of the sale of substantially all of its broadband assets. The net impact of
this gain increased the company's diluted earnings per share by $0.16.
o The company's Broadband segment also recorded a $17 million non-cash charge on
the exchange of $46 million of 9% Senior Subordinated Notes of BRCOM Inc. for
11 million shares of common stock in Cincinnati Bell Inc. The net impact of
this charge reduced the company's diluted earnings per share by $0.07.
2
o The company recorded a non-cash charge of $8 million to interest expense to
write-off deferred financing costs related to the company's bank credit
facilities. This charge arose as the result of using proceeds from the
issuance of $500 million in 7.25% Senior Notes due 2013 to reduce outstanding
bank debt. The net impact of this charge reduced the company's diluted
earnings per share by $0.04.
o The company recorded an adjustment to income tax reserves that resulted in a
$12 million benefit. The net impact increased the company's diluted earnings
per share by $0.05.
Excluding the impact of these special items, the company's operating income was
$92 million, net income was $22 million, and diluted earnings per share was
$0.08 for the third quarter.
LOCAL COMMUNICATIONS SERVICES
The company's local-exchange subsidiary, Cincinnati Bell Telephone (CBT),
produced revenue of $203 million for the third quarter, flat versus the same
quarter a year ago. Increases in DSL transport revenue offset declines in
business local service and special access revenue.
Operating income improved 13 percent to $80 million due to a 6 percent decrease
in operating expenses. The decrease in operating expenses was driven by a 17
percent reduction in depreciation expense and a 3 percent reduction in
headcount. Capital investment was $21 million, or 10 percent of revenue,
during the quarter.
Access lines declined by 20,000, or 2 percent, to 994,000 since the third
quarter of 2002, with 40 percent of the decline coming as the result of a
decrease in second access lines. However, DSL subscribership increased by
22,000, or 31 percent, compared to last year. In the third quarter, CBT added
5,300 net DSL subscribers, 1,200 more than the second quarter of 2003 and 2,300
more than the same quarter a year ago. Total DSL subscribers
3
now number 93,000, for a 9 percent penetration of total access lines. Eighty-six
percent of CBT's access lines are DSL-enabled.
Complete Connections, CBT's value-added services bundle, added 3,900 subscribers
during the quarter, bringing its total number of subscribers to 305,000, up 7
percent versus a year ago. Consumer penetration of Complete Connections now
stands at 43 percent. Custom Connections, the company's suite of customized
bundles that includes local, long distance, wireless and DSL, added 11,000
subscribers, increasing its subscribership 40 percent in the quarter to 39,000.
As a result of the company's success with these bundled offerings, CBT's total
revenue per household in the third quarter was $46, up 3 percent versus a year
ago. Similarly, total revenue per household, including wireless and long
distance offerings, was $74, up 2 percent versus a year ago.
WIRELESS SERVICES
For the third quarter, Cincinnati Bell Wireless (CBW) reported revenue of $65
million, down 6 percent from the third quarter of 2002. Operating income
declined 12 percent to $19 million, as expenses fell 3 percent. Capital
investment of $16 million included $11 million associated with the deployment of
the GSM/GPRS network, which began servicing customers on October 15.
CBW ended the third quarter with 461,000 total subscribers, a decrease of 1
percent versus the prior year. Postpaid churn remained low at 1.9 percent.
Anticipating the launch of the GSM/GPRS network, the company continued to manage
CBW for cash flow during the quarter, targeting its acquisition at highly
profitable prepaid subscribers that involve lower acquisition cost and whose
usage characteristics require little capital investment in CBW's existing Time
Division Multiple Access (TDMA) network.
Postpaid average revenue per user (ARPU) was $59, while prepaid ARPU was $19.
Wireless data revenue, representing charges for text messaging service,
contributed $1
4
and $3 to the postpaid and prepaid ARPUs, respectively. Postpaid cost per gross
add (CPGA) was $388, while prepaid CPGA was $42.
OTHER COMMUNICATIONS SERVICES
Other Communications Services, which includes the company's Cincinnati-area
retail voice long distance and public payphone operations, reported revenue of
$21 million in the third quarter, up 1 percent from a year ago. Operating income
of $3 million was $2 million higher than a year ago.
Estimated Cincinnati market share for Cincinnati Bell Any Distance, the
company's retail voice long distance offering, was 70 percent in the consumer
market and 45 percent in the business market, year-over-year improvements of 2
points and 3 points, respectively.
BROADBAND SERVICES
Broadband Services produced revenue of $32 million, all attributable to the
company's Cincinnati Bell Technology Solutions business (CBTS), which remains in
the Broadband segment following the sale of substantially all of the company's
broadband assets. Operating income of $33 million included $2 million from CBTS,
the previously discussed $37 million gain on the sale of the broadband assets,
and a $6 million operating loss from the remainder of the segment, driven
primarily by legal expenses associated with retained liabilities of BRCOM, Inc.
FINANCIAL POSITION
Cincinnati Bell Inc. reduced its net debt** by $516 million to $2.3 billion
during the third quarter through a combination of the following:
o a reduction of $459 million as a result of the exchange of the 12 1/2% Series
B Junior Exchangeable Preferred Stock and 9% Senior Subordinated Notes of
BRCOM Inc. for 25 million common shares of the company,
o a reduction of $54 million through cash flow* generated by operations,
o a reduction of $21 million from additional proceeds from of the sale of the
broadband assets,
5
o an increase of $18 million from in-kind interest expense and non-cash
amortization of debt discounts.
"Our strong third quarter financial performance continues to reflect vigilant
attention to customer service that preserves our existing revenue streams, as
well as disciplined cost management in a challenging telecom market," said Brian
Ross, Cincinnati Bell Inc.'s Senior Vice President - Finance & Accounting.
"Continued focus on activities that drive cash flow and margin performance will
be the hallmark of our company as we move forward in our efforts to further
de-lever our balance sheet."
USE OF NON-GAAP FINANCIAL MEASURES
*The company has presented certain information regarding cash flow in the
preceding discussion because the company believes cash flow provides a useful
measure of a company's operational performance, liquidity and financial health.
Cash flow is defined by the company as SFAS 95 cash provided by (used in)
operating, financing and investing activities, less changes in restricted cash
in operating activities, issuance and repayment of long-term debt in financing
activities, short-term borrowings (repayments) in financing activities and
proceeds from the sale of discontinued operations and assets in investing
activities. Cash flow should not be considered as an alternative to net income
(loss), operating income (loss), cash flow from operating activities, or the
change in cash on the balance sheet and may not be comparable with cash flow as
defined by other companies. A detailed reconciliation of the company's cash flow
to comparable GAAP financial measures is given in the attached financial
information and is posted on the company's website at www.cincinnatibell.com,
under the investor relations tab.
**The company has presented certain information regarding net debt in the
preceding discussion because the company believes net debt provides a useful
measure of a company's liquidity and financial health. Net debt is defined by
the company as short-term and long-term debt, plus the 12 1/2% Series B Junior
Exchangeable Preferred Stock of BRCOM Inc., offset by cash and cash equivalents.
A detailed reconciliation of the company's net debt to comparable GAAP financial
measures is given in the attached financial information and is posted on the
company's website at www.cincinnatibell.com, under the investor relations tab.
These non-GAAP financial measures should not be construed as being more
important than comparable GAAP measures. They are presented because Cincinnati
Bell Inc. management uses this information when evaluating the company's results
of operations and cash flow and believes that this information provides the
users of the financial statements with an additional and useful comparison of
the company's current results of operations and cash flows with past and future
periods.
6
CONFERENCE CALL/WEBCAST
Cincinnati Bell Inc. will host a conference call discussing its third quarter
2003 results on Thursday, October 30, 2003 at 9:00 am EST, which will be
web-cast on the company's website at www.cincinnatibell.com. A taped replay of
the conference call will be available one hour after the conclusion of the
teleconference until 5:00 (PST) on Thursday, November 6, 2003. For U.S. callers,
the replay will be available at 888-843-8996. For international callers, the
replay will be available at 630-652-3044. The playback passcode is 7829305.
ABOUT CINCINNATI BELL INC.
Cincinnati Bell Inc. (NYSE: CBB) is parent to one of the nation's most respected
and best performing local exchange and wireless providers with a legacy of
unparalleled customer service excellence. The company was recently ranked number
one in customer satisfaction, for the third year in a row, by J.D. Power and
Associates for residential long distance among mainstream users. Cincinnati Bell
provides a wide range of telecommunications products and services to residential
and business customers in Ohio, Kentucky and Indiana. Cincinnati Bell is
headquartered in Cincinnati, Ohio. For more information, visit
www.cincinnatibell.com.
SAFE HARBOR NOTE
Note: Information included in this news release contains forward-looking
statements that involve potential risks and uncertainties. Cincinnati Bell's
future results could differ materially from those discussed herein. Factors that
could cause or contribute to such differences include, but are not limited to,
Cincinnati Bell's ability to maintain its market position in communications
services, general economic trends affecting the purchase of telecommunication
services, world and national events that may affect the ability to provide
services, changes in the regulatory environment and its ability to develop and
launch new products and services. More information on potential risks and
uncertainties is available in the company's recent filings with the Securities
and Exchange Commission, including Cincinnati Bell's annual Form 10-K report,
Quarterly Form 10-Q reports, Forms 8-K, and Forms S-4 and S-3 Registration
Statements.
7
CINCINNATI BELL INC.
Consolidated Statements of Operations
(UNAUDITED)
(in millions - except per share amounts)
For the Three Months For the Nine Months
Ended September 30, % Ended September 30, %
2003 2002 Change 2003 2002 Change
-------- --------- ------- ---------- ----------- --------
Revenue $ 315.3 $ 570.3 (45%) $ 1,246.6 $ 1,669.3 (25%)
- -------
Costs & Expenses
- ----------------
Cost of Services and Products 124.0 254.1 (51%) 605.1 793.2 (24%)
Selling, General & Administrative 59.2 121.6 (51%) 287.6 376.4 (24%)
Depreciation and Amortization 39.8 126.8 (69%) 121.0 370.8 (67%)
Restructuring -- 7.1 n/m (3.4) 23.6 (114%)
Asset Impairments and Other Charges (Credits) -- -- n/m (0.7) -- n/m
Gain on Sale of Broadband Assets (37.3) -- n/m (336.3) -- n/m
-------- --------- ---------- -----------
Operating Income 129.6 60.7 114% 573.3 105.3 n/m
Minority Interest Expense 12.5 15.5 (19%) 42.5 44.4 (4%)
Loss on Extinguishment of Debt 17.4 -- n/m 17.4 --
Other (Income) Expense, Net (0.1) 1.4 n/m (0.8) 0.4 n/m
Interest Expense 67.2 40.1 68% 173.8 117.4 48%
-------- --------- ---------- -----------
Income (Loss) from Continuing Operations before Income Taxes,
Discontinued Operations and Cumulative Effect of 32.6 3.7 n/m 340.4 (56.9) n/m
Change in Accounting Principle
Income Tax Benefit (12.1) (0.3) n/m (12.1) (9.1) 33%
-------- --------- ---------- -----------
Income (Loss) from Continuing Operations before Discontinued
Operations and Cumulative Effect of Change in Accounting
Principle 44.7 4.0 n/m 352.5 (47.8) n/m
Discontinued Operations, Net of Taxes -- -- n/m -- 217.6 (100%)
Cumulative Effect of Change in Accounting Principle, Net of Taxes -- -- n/m 85.9 (2,008.7) n/m
-------- --------- ---------- -----------
Net Income (Loss) 44.7 4.0 n/m 438.4 (1,838.9) n/m
Preferred Stock Dividends 2.6 2.6 - 7.8 7.8 -
-------- --------- ---------- -----------
Net Income (Loss) Applicable to Common Shareowners $ 42.1 $ 1.4 n/m $ 430.6 $ (1,846.7) n/m
======== ========= ========== ===========
Basic Earnings (Loss) Per Common Share
- --------------------------------------
Income (Loss) from Continuing Operations before Discontinued
Operations and Cumulative Effect of Change in Accounting
Principle $ 0.19 $ 0.01 $ 1.56 $ (0.26)
Discontinued Operations, Net of Taxes -- -- -- 1.00
Cumulative Effect of Change in Accounting Principle, Net of Taxes -- -- 0.39 (9.20)
-------- --------- ---------- -----------
Net Earnings (Loss) Per Common Share $ 0.19 $ 0.01 $ 1.95 $ (8.46)
======== ========= ========== ===========
Diluted Earnings (Loss) Per Common Share
- ----------------------------------------
Income (Loss) from Continuing Operations before Discontinued
Operations and Cumulative Effect of Change in Accounting
Principle $ 0.18 $ 0.01 $ 1.51 $ (0.26)
Discontinued Operations, Net of Taxes -- -- -- 1.00
Cumulative Effect of Change in Accounting Principle, Net of Taxes -- -- 0.38 (9.20)
-------- --------- ---------- -----------
Net Earnings (Loss) Per Common Share $ 0.18 $ 0.01 $ 1.89 $ (8.46)
======== ========= ========== ===========
Weighted Average Common Shares Outstanding
- ------------------------------------------
- Basic 225.4 218.5 221.1 218.3
- Diluted 235.2 218.9 227.5 218.3
CINCINNATI BELL INC.
Consolidating Statements of Operations
(UNAUDITED)
(dollars in millions) For the Three Months For the Nine Months
Ended September 30, % Ended September 30, %
2003 2002 Change 2003 2002 Change
------------ ---------- ---------- ---------- ----------- ---------
Revenue
- -------
Local $ 203.4 $ 202.8 - $ 611.7 $ 616.6 (1%)
Wireless 65.1 68.9 (6%) 196.9 201.8 (2%)
Other 20.8 20.5 1% 61.7 61.6 -
Broadband 32.0 298.3 (89%) 422.1 848.2 (50%)
Corporate and eliminations (6.0) (20.2) (70%) (45.8) (58.9) (22%)
------------ ---------- ---------- -----------
Total Revenue $ 315.3 $ 570.3 (45%) $ 1,246.6 $ 1,669.3 (25%)
============ ========== ========== ===========
Cost of Services and Products
- -----------------------------
Local $ 61.8 $ 63.0 (2%) $ 191.4 $ 192.0 -
Wireless 26.9 27.8 (3%) 78.1 86.6 (10%)
Other 12.5 15.4 (19%) 41.2 46.8 (12%)
Broadband 25.4 162.7 (84%) 326.3 512.1 (36%)
Corporate and eliminations (2.6) (14.8) (82%) (31.9) (44.3) (28%)
------------ ---------- ---------- -----------
Total Cost of Services and Products $ 124.0 $ 254.1 (51%) $ 605.1 $ 793.2 (24%)
============ ========== ========== ===========
Selling, General & Administrative
- ---------------------------------
Local $ 30.5 $ 33.2 (8%) $ 99.0 $ 103.3 (4%)
Wireless 11.3 10.9 4% 35.0 35.8 (2%)
Other 4.7 3.7 27% 12.3 11.6 6%
Broadband 10.6 78.7 (87%) 137.1 236.1 (42%)
Corporate and eliminations 2.1 (4.9) (143%) 4.2 (10.4) (140%)
------------ ---------- ---------- -----------
Total Selling, General & Administrative $ 59.2 $ 121.6 (51%) $ 287.6 $ 376.4 (24%)
============ ========== ========== ===========
Depreciation and Amortization
- -----------------------------
Local $ 31.5 $ 38.0 (17%) $ 93.9 $ 109.9 (15%)
Wireless 7.5 8.2 (9%) 22.8 23.3 (2%)
Other 0.5 0.5 0% 1.5 1.4 7%
Broadband 0.1 80.0 (100%) 2.4 235.8 (99%)
Corporate and eliminations 0.2 0.1 - 0.4 0.4 -
------------ ---------- ---------- -----------
Total Depreciation and Amortization $ 39.8 $ 126.8 (69%) $ 121.0 $ 370.8 (67%)
============ ========== ========== ===========
Restructuring
- -------------
Local $ - $ (2.0) n/m $ - $ (1.6) n/m
Wireless - - n/m - - n/m
Other - - n/m - - n/m
Broadband - 5.0 n/m (3.4) 21.0 (116%)
Corporate and eliminations - 4.1 n/m - 4.2 (100%)
------------ ---------- ---------- -----------
Total Restructuring $ - $ 7.1 n/m $ (3.4) $ 23.6 (114%)
============ ========== ========== ===========
Asset Impairments and Other Charges (Credits)
- ---------------------------------------------
Local $ - $ - n/m $ 0.3 $ - n/m
Wireless - - n/m - - n/m
Other - - n/m 0.1 - n/m
Broadband - - n/m (1.1) - n/m
Corporate and eliminations - - n/m - - n/m
------------ ---------- ---------- -----------
Total Asset Impairments and Other Charges (Credits) $ - $ - n/m $ (0.7) $ - n/m
============ ========== ========== ===========
Gain on Sale of Broadband Assets
- --------------------------------
Local $ - $ - n/m $ - $ - n/m
Wireless - - n/m - - n/m
Other - - n/m - - n/m
Broadband (37.3) - n/m (336.3) - n/m
Corporate and eliminations - - n/m - - n/m
------------ ---------- ---------- -----------
Total Gain on Sale of Broadband Assets $ (37.3) $ - n/m $ (336.3) $ - n/m
============ ========== ========== ===========
Operating Income
- ----------------
Local $ 79.6 $ 70.6 13% $ 227.1 $ 213.0 7%
Wireless 19.4 22.0 (12%) 61.0 56.1 9%
Other 3.1 0.9 244% 6.6 1.8 267%
Broadband 33.2 (28.1) n/m 297.1 (156.8) n/m
Corporate and eliminations (5.7) (4.7) 21% (18.5) (8.8) 110%
------------ ---------- ---------- -----------
Total Operating Income $ 129.6 $ 60.7 114% $ 573.3 $ 105.3 n/m
============ ========== ========== ===========
CINCINNATI BELL INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions - except debt covenants and segment information)
September 30, December 31,
2003 2002
------------- ------------
Assets
- ------
Cash and Cash Equivalents $ 32.9 $ 44.9
Restricted Cash -- 7.0
Receivables - Net 139.0 290.6
Materials and Supplies 40.5 32.2
Other Current Assets 42.7 43.5
Property, Plant and Equipment - Net 923.2 867.9
Goodwill 40.9 40.9
Other Intangible Assets - Net 66.5 66.9
Other Noncurrent Assets 82.5 73.7
--------- ---------
Total Assets $ 1,368.2 $ 1,467.6
========= =========
Liabilities and Shareowners' Deficit
- ------------------------------------
Debt Maturing in One Year $ 106.8 $ 203.7
Current Portion of Unearned Revenue and Customer Deposits 30.4 108.9
Accounts Payable 59.0 129.4
Accrued Taxes 53.9 84.4
Other Current Liabilities 157.7 210.7
Long-Term Debt, Less Current Portion 2,236.9 2,354.7
Unearned Revenue, Less Current Portion 2.6 293.3
Other Noncurrent Liabilities 213.7 186.9
Minority Interest 40.0 443.9
Common Shareowners' Deficit (1,532.8) (2,548.3)
--------- ---------
Total Liabilities and Shareowners' Deficit $ 1,368.2 $ 1,467.6
========= =========
Other Data:
- -----------
Common Shares Outstanding at Balance Sheet Date 244.2 218.7
Net Debt $ 2,310.8 $ 2,927.9
Credit Facility Availability (See Note 1) $ 268.8 $ 163.9
Debt Covenants (See Note 2):
- ----------------------------
Debt to EBITDA Ratio - Calculated 4.64 n/a
Debt to EBITDA Ratio - Required 5.90 n/a
Senior Secured Debt to EBITDA Ratio - Calculated 1.93 n/a
Senior Secured Debt to EBITDA Ratio - Required 3.85 n/a
Interest Coverage Ratio - Calculated 4.00 n/a
Interest Coverage Ratio - Required 2.84 n/a
Year-to-date Capital Expenditures - Actual 90.9 n/a
Maximum Annual Capital Expenditures - Allowed 146.0 n/a
Segment Information (in thousands):
- -----------------------------------
Local Access Lines 994.2 1,011.9
Complete Connections Subscribers 305.4 288.9
DSL Subscribers 92.6 74.8
Custom Connections Subscribers 38.7 --
Postpaid Wireless Subscribers 299.0 311.2
Prepaid Wireless Subscribers 162.3 159.2
--------- ---------
Total Wireless Subscribers 461.3 470.4
Consumer Long Distance Lines 417.1 431.3
Business Long Distance Lines 125.0 123.5
--------- ---------
Total Long Distance Lines 542.1 554.8
Note 1: Credit facility availability includes $60.0 million of remaining net
proceeds received from the closing of the sale of substantially all of
the broadband assets. According to the terms of the credit agreement,
these proceeds are to be used to settle the retained liabilities of the
broadband unit or permanently reduce borrowings under the credit
facility.
Note 2: The company renegotiated its debt covenants in March 2003 in
conjunction with its refinancing, which rendered historical covenant
information irrelevant.
CINCINNATI BELL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(dollars in millions) For the Three Months
Ended September 30,
SFAS 95 CONSOLIDATED CASH FLOW 2003 2002
------- -------
SFAS 95 Cash provided by operating activities $ 107.2 $ 106.8
Capital expenditures (37.3) (40.2)
Cash provided by sale of Broadband assets 20.5 -
Other 1.4 -
------- -------
SFAS 95 Cash used in investing activities (15.4) (40.2)
Issuance of long-term debt 500.0 18.0
Repayment of long-term debt (569.5) (66.1)
Short-term repayments, net (2.0) (2.7)
Debt issuance costs (17.8) (1.8)
Issuance of common shares - exercise of stock options 0.2 -
Preferred stock dividends paid - (2.7)
------- -------
SFAS 95 Cash used in financing activities (89.1) (55.3)
------- -------
Net increase in cash and cash equivalents 2.7 11.3
Cash and cash equivalents at beginning of period 30.2 23.4
------- -------
Cash and cash equivalents at end of period $ 32.9 $ 34.7
======= =======
RECONCILIATION OF SFAS 95 CASH FLOW TO CASH FLOW AS DEFINED BY THE COMPANY
Net increase (decrease) in cash and cash equivalents $ 2.7 $ 11.3
Less adjustments:
Cash provided by sale of Broadband assets (investing activities) 20.5 --
Issuance of long-term debt 500.0 18.0
Repayment of long-term debt (financing activities) (569.5) (66.1)
Short-term borrowings (repayments), net (financing activities) (2.0) (2.7)
------- -------
Cash flow (as defined by the company) $ 53.7 $ 62.1
======= =======
Cash Expenditures for Restructuring $ (2.9) $ (11.0)
Income Tax Refunds Received $ 0.2 $ 38.5
CINCINNATI BELL INC.
CONSOLIDATED REVENUE AND OPERATING INCOME EXCLUDING BROADBAND
(UNAUDITED)
(dollars in millions) For the Three Months
Ended September 30, %
2003 2002 Change
------- ------- --------
RECONCILIATION OF CONSOLIDATED REVENUE TO CONSOLIDATED REVENUE EXCLUDING BROADBAND
Revenue $ 315.3 $ 570.3 (45%)
Less adjustments:
Broadband Revenue 32.0 298.3 (89%)
Broadband Intercompany Activity (1.2) (15.9) (92%)
------- -------
Consolidated Revenue Excluding Broadband $ 284.5 $ 287.9 (1%)
======= =======
RECONCILIATION OF CONSOLIDATED OPERATING INCOME TO CONSOLIDATED OPERATING INCOME
EXCLUDING BROADBAND
Operating Income $ 129.6 $ 60.7 114%
Less adjustments:
Broadband Operating Income 33.2 (28.1) n/m
------- -------
Consolidated Operating Income Excluding Broadband $ 96.4 $ 88.8 9%
======= =======
CINCINNATI BELL INC.
NET DEBT CALCULATION
(UNAUDITED)
September 30, 2003 vs. September 30, 2003 vs.
June 30, 2003 December 31, 2002
Change Change
September 30, June 30, ------------------- December 31, -------------------
(dollars in millions) 2003 2003 $ % 2002 $ %
----------------------- ------------------ ------------ -------------------
Credit Facilities $ 639.9 $1,209.5 $ (569.6) (47%) $1,648.1 $(1,008.2) (61%)
Cincinnati Bell Telephone notes 270.0 270.0 - - 270.0 - -
9% Senior subordinated notes of BRCOM - 46.0 (46.0) (100%) 46.0 (46.0) (100%)
7 1/4% Senior notes due 2013 of Cincinnati Bell Inc. 500.0 - 500.0 100% - 500.0 100%
16% Senior subordinated notes of Cincinnati Bell Inc. 357.1 353.5 3.6 1% - 357.1 100%
7 1/4% Senior notes due 2023 of Cincinnati Bell Inc. 50.0 50.0 - - 50.0 - -
Convertible subordinated notes of Cincinnati Bell Inc. 534.5 522.7 11.8 2% 502.8 31.7 6%
Capital leases 33.6 35.2 (1.6) (5%) 39.0 (5.4) (14%)
Other short-term debt 2.8 3.2 (0.4) (13%) 2.6 0.2 8%
Unamortized discount (44.2) (46.3) 2.1 (5%) (0.9) (43.3) n/m
12 1/2% Senior Notes of BRCOM - - - - 0.8 (0.8)
12 1/2% Series B Junior Exchangeable Preferred Stock
of BRCOM Inc. - 413.0 (413.0) (100%) 414.4 (414.4) (100%)
-------- -------- -------- -------- --------
Total Debt and Minority Interest 2,343.7 2,856.8 (513.1) (18%) 2,972.8 (629.0) (21%)
Less: Cash and Cash Equivalents 32.9 30.2 2.7 9% 44.9 (12.0) (27%)
-------- -------- -------- -------- --------
Net Debt (as defined by the company) $2,310.8 $2,826.6 $ (515.8) (18%) $2,927.9 $ (617.0) (21%)
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